Brave New World: After the Ticketmaster/Live Nation Merger

Apr. 02, 2010

Two months after the Ticketmaster and Live Nation merger, the ticketing world is still adjusting to the new playing field. Billboard took a look around and came up with the following results: promoters need options! As this article points out, promoters and club owners don’t really want to work with their competition (Ticketmaster/Live Nation). Thankfully that’s where we fit in! Ticketfly provides a nice alternative for club owners and promoters, like I.M.P., who are looking to stay independent and break away from Ticketmaster.

Read below for Ray Waddell’s full story:

Brave New World

March 27, 2010

By RAY WADDELL

Nearly two months after the U.S. Department of Justice’s conditional approval of the Live Nation-Ticketmaster merger, the new ticketing landscape is starting to take shape.

The DOJ’s conditions in approving the merger‹that AEG can private-label Ticketmaster’s primary ticketing software for its accounts and that Live Nation Entertainment must sell its Paciolan division to Comcast-Spectacor‹were designed to create competition for the newly formed giant. And it appears, so far, that competition will exist. But how it will play out is still anyone’s guess.

Before it dropped Ticketmaster and launched its own ticketing division in early 2009, Live Nation had represented about 10% of Ticketmaster’s overall business. The bulk of that was in Live Nation’s 40-plus amphitheaters and the numerous clubs and theaters it operates.

A year later, Live Nation Entertainment appears certain to ticket its own venues. Indeed, that’s where the synergies exist in being a venue owner, concert promoter, artist manager and ticketing company. Billboard estimates the combined company will sell about 200 million tickets this year.

The real battleground for new ticketing contracts will be in the box offices of arenas and stadiums. Ticketmaster is dominant in this area, but contracts with arenas and the teams that are their primary tenants (and often their owners and/or managers) expire all the time. And now, it seems, they’ll be in play, making sports the wild card.

Comcast-Spectacor now has Paciolan to add to its New Era Ticketing, with many of Paciolan’s 200 clients in college athletics. In addition to facility management firm Global Spectrum, Comcast-Spectacor owns Philadelphia’s NBA and NHL franchises, the 76ers and the Flyers. Comcast-Spectacor president Peter Luukko says he expects the company to leverage its sports expertise.

“If you look at what we’re doing with Paciolan, if you look at Comcast-Spectacor, we’re a venue-/team-based company, and we’re going to be taking that angle,” Luukko says. “We’re going to actively bid for any contract that’s out there. Paciolan has a strong niche in the collegiate market and performing arts centers, and we’re in varied types of venues, so we’re going to continue to blanket the marketplace and compete for contracts as they expire.”

Several years ago, Ticketmaster saw the writing on the wall as barriers to market entry were coming down. So, armed with an unrivaled database, the company began adding marketing services to its proven ticketing abilities. As a promoter, Live Nation was already a marketer as well, and tapping into that ticket marketing tool was an important factor in its split with Ticketmaster.

Luukko says his company can compete on that front. “We’re marketers,” he says. “Ticketing is a marketing tool now, and it’s going to be an even bigger marketing tool. The data collection, the ability to name the system, exclusive data, it’s all very important.”

And then there’s Anschutz Entertainment Group, whose primary business is arenas and sports teams, despite owning the second-largest global concert promotion firm, AEG Live. This makes AEG a hugely influential player in the market as a sort of hybrid of Live Nation Entertainment and Comcast-Spectacor. Asked about AEG’s integration of the Ticketmaster ticketing system, AEG Live CEO Randy Phillips describes the situation as “status quo, with more advantageous economic terms.”

These terms may be advantageous now, but sources told Billboard when the DOJ’s approval of the merger was announced that the agreement between AEG and Ticketmaster was a scaling deal that would become more expensive for AEG every year for the next three years. So even though it’s a favorable deal for AEG now, it probably will be much less so in 2013. By that time, however, all signs point to AEG launching its own ticketing system, whether through acquisition or building it from the ground up.

Ticket contracts for promoters and music venues from the club level on up will also be hotly contested. Take, for example, I.M.P. Productions in Washington, D.C., which owns the 9:30 Club and books the Merriweather Post Pavilion in Columbia, Md. Both venues now have ticketing contracts with upstart Ticketfly. The Merriweather signing was significant because it was the first large-venue shift from Ticketmaster to another ticketing company since the merger was approved.

Did the merger’s approval have anything to do with Merriweather going with Ticketfly? “No question about it,” I.M.P. chairman Seth Hurwitz told Billboard.biz at the time. “I was happy with Ticketmaster, but I can’t have my competitor selling my tickets. It’s just not going to happen.”

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